(NC)-If you're currently retired or nearing retirement, a significant new amendment to the Income Tax Act may help you save on taxes. In 2007, the Parliament of Canada signed into law a provision to allow pension income splitting.
There are several specific rules and conditions that define and govern these types of provisions, and pension income splitting is no exception.
That said, pension income splitting can be a very effective way to lower a household's overall tax bill if you take into account the fine points that should be looked at carefully to ensure an optimal split. For example many people aren't aware that increasing the income of the lower taxed spouse could have an impact on various credits and benefits such as claiming medical expenses.
Here are six pension income splitting facts to help you make the most of this opportunity:
This column, written and published by Investors Group Financial Services Inc. (in Quebec - a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances.